Allowing other people to operate your personal property may result in you being liable for any injuries the borrower causes — under certain circumstances. Whether it be a truck, car, boat, or other personal property, the concept is called Negligent Entrustment and addresses the question of when property should be loaned to other people, and when it should not.
For example, negligent entrustment will visit the liability of a vehicle operator upon the owner of the vehicle if the vehicle’s owner knew or through the exercise of ordinary care could have known of the operator’s unsafe propensities or incapability of operating the vehicle.
Historically, concept of negligent entrustment is based on The Restatement of Torts 2d, ‘390 which states:
One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.
In Bell v. Green, 423 S.W.2d 724, 732 (Mo.banc 1968), the Missouri Supreme Court spoke of negligent entrustment as a concept as follows:
We refer, by way of analogy, to the line of authorities holding that the owner of a car may be liable if he, knowingly or having the means of knowledge, turns his car over to a driver who is incompetent by reason of age, inexperience, habitual recklessness or otherwise; such liability further depends upon a finding that the act of the owner concurs with the negligence of the driver as a proximate cause of the injury.
Citing the decision in Bell, in Evans v. Allen Auto Rental, 555 SW2d 325 (Mo. Banc. 1977) the Supreme Court then finalized the initial formulation of negligent entrustment by setting out the essential elements which must be shown in order to invoke the doctrine of negligent entrustment:
(1) That the entrustee is incompetent by reason of age, inexperience, habitual recklessness or otherwise; and
(2) That the entrustor knew or had reason to know of the entrustee’s incompetence; and
(3) That there was an entrustment of the chattel; and
(4) That the negligence of the entrustor concurred with the conduct of the entrustee as a proximate cause of the harm to plaintiff.
In essence, negligent entrustment can occur under one of two circumstances, the first being an “acute” condition (a present intoxication by way of example) that should prevent lending the vehicle or dangerous instrument at that particular time. A second type of negligent entrustment occurs when the person to whom the vehicle or other dangerous instrument is to be loaned has proven over time that they are incapable of making use of the vehicle or instrumentality in a safe fashion, for whatever reason.
One or both conditions may be present in any given fact situation.
For example, if the vehicle owner knows, or should know by exercise of reasonable care, that the borrower uses prescription medications that are accompanied by one of the Do Not Drive Or Operate Machinery type of labels, then the owner probably should not loan out the vehicle without first confirming that it will not be operated while the borrower is under the influence of the medication.
And if the reason the borrower has no vehicle of their own available is that the borrower had wrecked all their vehicles while operating under the influence of the medication, then the owner’s vehicle can not safely be loaned at all.
Vehicle owners should also take care to recognize that, if they negligently entrust a vehicle, they may do so without adequate insurance coverages.
The insuring agreement in most automobile insurance policies will provide coverage for the owner for acts related to the ownership, use, or maintenance of the vehicle. The insuring agreement will also provide operation coverage for any permissive user of the vehicle.
But the coverages under the automobile policy are limited to that single coverage and are not duplicated.
In other words, a $100,000/$300,000 automobile policy will provide up to $100,000 per claimant for a single event. If the claimant sues the borrower for negligent operation of the vehicle and jointly sues the owner for negligent entrustment, and the jury awards a $200,000 verdict, there still remains only a $100,000 insurance policy. The $100,000 policy will not pay $100,000 for the owner and another $100,000 for the borrower.
Without delving into the complexities of statutory joint & several liability between jointly sued defendants (a separate article), under this scenario there remains a $100,000 deficiency in payment of the verdict that both the owner and the borrower may be jointly liable to pay.
In addition, because Missouri statutorily requires purchase of automobile insurance under the Financial Responsibility Law, most general liability policies (a homeowner’s policy for example) specifically exclude any claims related to automobile ownership, use or maintenance — and those exclusions usually are upheld to deny general liability coverage on claims for negligent entrustment of a vehicle. For example, see Shelter Mutual Insurance Co. v. Politte, 663 S.W.2d 777 (Mo. App. E.D. 1983).
In the event you are considering loaning out a car, boat, truck, or any other personal property that can cause injury, you should have an experienced Rolla injury attorney or insurance attorney to advise you on the rights, remedies, and risks attendant to making the equipment loan.
By: Joseph W. Rigler
DID YOU KNOW ? is presented by Williams, Robinson, Rigler & Buschjost, PC as a public information service only. None of the information contained herein is intended to be taken as legal advice. Each matter depends on unique facts which attorneys must consider in forming an opinion, and may depend on laws unique to a particular jurisdiction. No two cases are the same. If you want to know more about this subject, contact Williams, Robinson, Rigler & Buschjost, PC, or the attorney of your choice, and seek a formal opinion about your particular case.
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